Virginia Business Law Update

It is clear that the economic downturn has lessened the appetite for companies to spend money on anything not perceived as a “necessary business expense.” The importance of intellectual property (IP) rights in a 21st century, knowledge economy, however, dictates that individual inventors and small- and medium-sized businesses (“SMBs”) find capital to file for patents and trademarks relating to their truly innovative products and services.

The above then begs the question: How can SMBs save money in hiring and engaging IP legal counsel? Well, the answer to this question contains many variables related to the specific IP attorney being hired. Such variables include the region where the IP attorney works, the size of law firm in which they practice, their level of experience, the complexity of the IP involved, etc.

The above variables aside, there is one constant in the price equation that I consistently advise SMBs to pay attention to – the preparation of their disclosure materials BEFORE meeting with any newly-engaged IP counsel. That is, SMBs (and individual entrepreneurs) can directly and significantly control their IP legal cost through careful preparation of their disclosure materials. I have seen $5000 legal bills turned into $15000 legal bills through the needless “back and forth” between an IP attorney who is “on the clock” and a client who has prematurely engaged such IP attorney. So, what do I mean by disclosure materials and how should an SMB prepare them? Well, I answer in two parts:

With respect to an invention needing a patent application, disclosure materials means an SMB gathering and organizing all relevant papers, sketches, drawings, notes, software code, formulations, etc. that provide the IP attorney with the following information:

• Title of the invention
• The full legal names, addresses and citizenship of all inventors
• The full name, address and state of incorporation of the company who will own the patent (if any)
• A description of the problem solved by the invention
• A description of how long the problem has been around and how have others tried to solve the problem
• A description of how the invention solves the problem differently than past solutions or attempted solutions
• System diagrams showing all hardware/software components of the invention
• Flowcharts illustrating the steps of the invention
• A list any known websites, publications, patents, products, services, etc. that are relevant to the subject matter of the invention
• A description of how the invention relates to the launch of a new product or service
• Dates the invention was (or will be): first conceived; implemented as a pilot or otherwise used in the public domain; reduced to actual practice; the subject of a publication or public disclosure; sold or offered for sale; and/or internally exploited

With respect to a mark or logo needing a trademark application, disclosure materials means an SMB gathering and organizing the following information to provide to the IP attorney:

• A description of the mark
• The full name, address and state of incorporation of the entity who will own the trademark
• A description of all the types of products and/or services with which the mark is actually used or will be used
• Date of any first sale of goods bearing the mark in interstate commerce
• Copies of any specimens showing the mark as it is currently (or will be) used on or in connection with the goods or services
• A description of how the mark is actually used or intended to be used

A prepared and organized client is one who receives efficient IP legal services and a reasonable legal bill from their IP attorney, and is consequently glad to pay that reasonable bill!